China’s love affair with jade and pearl is firmly rooted in history. The ancient Chinese book Shang Shu (the Book of History) recorded the oldest written mention of natural pearls in 2206 BC. Chinese fondness for jade, meanwhile, dates back to the Neolithic Age some 7,000 years ago. Jadeite from Myanmar reached the imperial court of the Qing Dynasty in late 1700s. In the late 18th and early 19th century, carvers in China created jadeite masterpieces that are still unsurpassed in concept, design and technique.

Coloured gemstones are relative newcomers in this setting but are increasingly making headway in China. Transparent, facettable varieties such as ruby, sapphire, emerald, spinel and Paraiba tourmaline are winning over gem enthusiasts, collectors and jewellery lovers in a market where translucent and opaque gems have historically thrived. Rubies, sapphires and emeralds first started to gain favour in 2013 and 2014. Momentum accelerated in 2015 and 2016 as awareness grew among jewellers and consumers, according to Lin Xifeng, president of the Guangdong Colored Gemstone & Jewelry Chamber of Commerce. Demand grew steadily, with sharp spikes in interest in the last few years due to celebrity endorsements and patronage, expanded sales channels and reinforced consumer education.

According to data from the Gems and Jewelry Trade Association of China, total jewellery retail sales in 2020 reached US$88.44 billion. Plain gold jewellery contributed the majority of sales at 55.7 per cent. Traditional Chinese favourites, namely jadeite, nephrite and pearl, accounted for 22.2 per cent of total jewellery retail sales, while other coloured gemstones brought in 4.9 per cent. Meanwhile, 13.1 per cent of the total jewellery retail sales value that year came from diamond jewellery.

Evolving market preferences

Jewellery designer Paloma Sanchez witnessed the China market’s gradual acceptance of coloured gemstones. A GIA graduate gemmologist who has been living in Beijing since 2006, she noted that while Chinese consumers generally have a strong affinity with stones and the energy these emanate, their taste in jewellery had often veered towards conservative, traditional choices such as jade.

The arrival of Western and Hong Kong brands in the mainland market introduced locals to diamond jewellery, which then cornered purchases. According to Sanchez, interest in coloured stones has recently picked up, boding well for her brand of jewellery that features coloured gemstones and rare, unique gems.

The mainland market has indeed diversified of late, said Wu Qiong, president of Besure Jewellery. “Chinese love the colour red, which is associated with joy and prosperity, as well as green, which is the colour of jadeite. In recent years, demand has strengthened for 1-carat rubies, 2-carat sapphires as well as emeralds of 3 and 4 carats,” she revealed.

According to Wu, no-heat stones are preferred over their heated counterparts, especially for rubies. The market is however becoming more accepting of treated stones such as heated blue sapphires. Years of trade and consumer education are also paying off when it comes to emeralds. Customers would now consider purchasing treated emeralds but mostly prefer minor-oil stones. Still, no-oil emeralds remain the most sought after and command huge premiums.

Interest in spinel is also on the rise, Wu remarked. Particularly favoured are fine coloured spinel from Africa, notably red and pink stones of 2 carats and up, and spinel from Myanmar, especially those over 1 carat.

Lok Chen, vice president of Cai Bao Cheng, attests to the strong run high-quality spinels and Jedi spinels are currently enjoying in the mainland market. Likewise doing well are rubies, emeralds and sapphires that dominate the high-end market. Meanwhile, tourmaline, aquamarine and morganite have developed a strong following in the midrange category, he added.

Sanchez agrees that more coloured gemstones are catching the fancy of Chinese consumers. “Tourmaline is seen as a lucky stone for health and prosperity. Sapphire, tanzanite and ruby all reached Chinese shores, had their ups and downs but are here to stay. Phenomenal gemstones such as cat's eye chrysoberyl, star sapphire and star ruby, moonstone and opal are starting to hit the market now,” she revealed.

Origin premiums

As in other parts of the world, provenance plays an important role in determining gemstone demand and pricing in China, with stones from preferred origins generally fetching higher prices. Rubies, sapphires and spinel from Myanmar are held in high regard, while emeralds from Colombia are looked upon favorably.

Gemstones from sources new to the Chinese market are making waves, too. Lin of Guangdong Colored Gemstone & Jewelry Chamber of Commerce cites emeralds from Swat Valley, Pakistan as promising due to their vibrant colour and competitive prices.

Winza Jewelry Founder Aqeel Chaudhry, a Pakistani jeweller and miner who has been living in China for more than a decade, confirms that Swat emeralds are valued for their exceptional transparency, vibrant colour and natural hexagonal crystal formations.

His company started promoting Swat Valley emeralds in the Chinese market in 2014 and has participated in more than 100 jewellery shows in Tier 1 and Tier 2 cities, accumulating a wealth of data and experience on consumer demographics and preferences.

“When it comes to emeralds, the first thing that comes to mind is Colombian emeralds. Swat Valley emeralds from Pakistan have actually been around for over 2,500 years. They might have been well known to ancient Romans but are new to the Chinese gem industry. In recent years, they have been growing in popularity,” said Chaudhry.

Assessment and supply

As coloured gemstones are relatively new to the Chinese market, professional buyers and end-consumers rely heavily on colour trade terms and grading reports in assessing goods.

Popular colour trade terms doubled as brand names and effectively gained wide market acceptance in China. Retail stores, e-commerce sites and auctions all favour grading reports featuring these colour trade terms.

The Chinese market still relies on grading reports to provide some level of quality assurance especially when it comes to colour codes and treatment levels, said Lin.

Chen of Cai Bao Cheng added that most consumers still pay more attention to the colour trade terms in grading reports than the appearance of the actual stone when evaluating prices.

The supply of coloured gemstones has however been tight in the last two years due to the Covid-19 pandemic, which has affected the schedule of tenders, among others.

Inventory levels have fallen significantly for traders in China, according to Lin. Travel restrictions hampered buyers’ access to foreign markets and trade shows, forcing them to rely on the inventory of local dealers. Established working relationships also helped maintain supply as Chinese buyers transacted with trusted overseas partners based on digital images of the goods they wanted to procure.

Supply shortages have inevitably led to price increases. Wu of Besure Jewellery revealed that prices of good-quality rubies and emeralds have gone up at least 50 per cent annually in the last two years due to supply instabilities amid stable demand.

Sanchez noted that China has evolved into a more educated and better-informed market with economically independent women as well as younger consumers seeking to express their own style.

“Chinese consumers are mostly self-confident individuals whose preferences are different from older generations. They are not motivated by the investment value of their purchases and get no satisfaction from proving they can afford luxury items. They seek uniqueness and want to acquire items that represent them: A unique piece as unique as each one of us is. Therein lies the growing appeal of coloured gemstone jewellery,” she said.

In addition, coloured gems offer bright sparks of hope and joy in a world weary of pandemic restrictions. “This is the best opportunity for coloured gemstone jewellery. In my experience, patience and, above all, education are the key,” Sanchez concluded.

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CHINESE GEM PREFERENCES

Submissions for laboratory testing are a barometer of gemstone demand in terms of varieties, colours, sizes, origins and other factors. The Asian Institute of Gemological Sciences (AIGS) has been testing and grading coloured gemstones for over four decades. In 2020, it opened a branch in Shanghai and then a second location in Shenzhen. This analysis is based on submissions to AIGS China Laboratory in 2021.

RUBY

Rubies are the most popular coloured gemstone in the Chinese market, accounting for 42 per cent of total submissions to AIGS in 2021.

Origin: Some 40 per cent of submissions are tested for origin. Mozambique is the main source of rubies in China, accounting for 52 per cent of the total. The second largest source is Myanmar, at 25 per cent. Some of these are tested further to determine specific mining areas – 32 per cent are from Mogok. Madagascar is another important source, at 7 per cent. Other origins are Thailand, Tajikistan, Tanzania, Afghanistan, Pakistan and Vietnam, accounting for a combined total of 16 per cent.

Colour: Pigeon blood is the preferred ruby colour for most Chinese buyers.

Treatment: Around 76 per cent of all tested rubies are untreated. While heat treatment of rubies is internationally accepted, Chinese consumers still prefer unheated stones.

Weight: Rubies of 1 carat to 2.99 carats are the most popular in the Chinese market, accounting for 67 per cent of submissions. Stones under 1 carat comprised 11 per cent of submissions; 1 carat to 1.99 carats, 55 per cent; 2 carats to 2.99 carats, 12 per cent; over 3 carats, 6 per cent; and gemstone-studded jewellery, 16 per cent.
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SAPPHIRE

Sapphire is the second most popular coloured gemstone in China, based on AIGS records. Blue sapphires accounted for 70 per cent of submissions while Padparadscha sapphires made up 15 per cent. Other colours constituted 14 per cent.

Origin: Some 45 per cent of submissions are tested for origin. The most important sources are Sri Lanka (45 per cent), Myanmar (22 per cent) and Madagascar (19 per cent). The rest are Mozambique, Thailand, Pakistan, Afghanistan, Brazil and Kashmir (14 per cent combined).

Colour: According to AIGS, 74 per cent of all submitted blue sapphires were royal blue while 13 per cent were cornflower blue. These two colour designations are highly sought after in the Chinese market.

Treatment: 53 per cent of the sapphires tested by AIGS China Laboratory in 2021 were unheated while 47 per cent were heated, indicating that heat treatment was more acceptable to Chinese buyers for sapphires than for rubies. Some dealers requested further testing of colour stability and diffusion treatment. Only seven stones were found to be synthetic sapphires in 2021.

Weight: Sapphires from 1 carat to 4.99 carats constituted 67 per cent of submissions. This is notably bigger than the preferred ruby size. Of the sapphires submitted for testing, 5 per cent were under 1 carat, 35 per cent from 1 carat to 1.99 carats, 18 per cent from 2 carats to 2.99 carats, 14 per cent from 3 carats to 4.99 carats, 7 per cent from 5 carats to 9.99 carats, 2 per cent over 10 carats, and 19 per cent were gemstone-studded jewellery.
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EMERALD

Origin: Provenance is especially significant for emeralds, with 60 per cent of submissions tested for origin. The most important sources are Colombia at 57 per cent, Zambia at 33 per cent, Afghanistan at 5 per cent and Brazil at 5 per cent.

Treatment: Data shows that emeralds with no indication of clarity enhancement (often called “no oil”) are very rare in the market, accounting for only 1 per cent of submissions. At least 82 per cent of emeralds submitted for testing had minor clarity enhancement.
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SPINEL

Spinel is growing in favour in China. Popular varieties are red spinels from Myanmar and Mahenge spinels from Tanzania. Of all the spinels received for origin testing in 2021, 88 per cent were from Myanmar, 7 per cent from Tanzania and 5 per cent from Vietnam. Jedi spinels made up 26 per cent of submissions.
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PARAIBA TOURMALINE

Paraiba tourmaline is winning over Chinese consumers. Only 30 per cent of submissions were tested for origin. Of these, 57 per cent were from Mozambique and 43 per cent from Brazil. Mozambique goods mainly ranged from 2 carats to 3.99 carats while Brazilian stones were predominantly under 1 carat.